FinTech

FinTech – Our Sector at a Glance  

FinTech is not just London, Singapore, Hong Kong, and San Francisco. These global hubs all deliver great financial products and services, but there’s plenty happening outside of them. Explore what Malta has to offer and plug into our FinTech ecosystem.

• Well Diversified Sector

Our FinTech sector is a story of big and small. Some companies need no introductions – besides Malta, they have offices in other fintech hubs. Others are niche players or start-ups, which are equally crucial for the development and growth of our fintech economy. They are either in the process of optimising their business models or are past the seed and development stage, know their product is feasible, and are now working on scaling it up.

Key cluster strengths span from banking and payment providers to platforms for AML/KYC compliance, risk and asset management, as well as insurtech and digital identity management, and beyond. We are now building on that expertise, branching out into other FinTech segments and are looking to attract global partners to apply the solutions developed by firms in Malta. In our small but active finance community, it’s easy for technology-driven companies to connect and collaborate to create new disruptive products and business models.

• FinTech Sandbox and Innovation Hub

The Malta Financial Services Authority (MFSA), the regulator for all financial services in Malta, has a clear fintech strategy. The authority is committed to establishing the right conditions for FinTech start-ups and scale-ups, tech firms and traditional financial services firms to develop fintech products that have the power and potential to define the next generation of finance. The MFSA has established a FinTech Regulatory Sandbox which provides financial services providers with a controlled environment to test innovative products and services.

The authority is also building up a FinTech Innovation Hub, which will offer firms guidance on regulatory matters while firms can also benefit from shared resources, including operational infrastructure. As FinTech firms go cross-border, the MFSA is also working with its counterparts in other countries, in and outside the EU, to promote growth and foster cooperation.

• Support for Disruptive Technologies

FinTech companies can also benefit from Malta’s supportive stance for emerging technologies. Malta is one of the few countries in the world with clearly established regulatory frameworks for DLTs, ICOs, and virtual currencies. Malta also established a new regulatory authority – the Malta Digital Innovation Authority (MDIA). The MDIA, the first regulator of its kind in the world, certifies DLT platforms and smart contracts while handling the voluntary registration of technology arrangements.

The MDIA works hand in hand with the MFSA, which has been tasked with the approval and supervision of virtual financial assets exchanges. The ultimate aim of the regulation is to bring legal order to a market environment that thus far was mostly unregulated in order to ensure consumer protection and market integrity.

AI and IoT technologies are next on the country’s agenda. Globally and locally, most FinTechs are already using AI, and the technology is expected to dominate the market by 2025. Malta is currently identifying policy, regulatory and fiscal measures to strengthen its appeal as a hub for foreign investment in AI and IoT technologies.

• FinTech Market Opportunities

The small size of our island makes it the ideal test environment for new technologies and ventures in need of a flying start. Companies can develop and test new products and services on the diverse, yet concentrated, local market before exporting their services and solutions to Europe and further afield.

In addition, established companies, seeking more innovative and economical solutions, are ready to partner and collaborate with new players, creating exciting opportunities for companies disrupting segments such as payments, insurance, investment as well as compliance in equal measure. Malta’s Government is also a big backer of new technologies, including DLT, AI, and IoT, and wants to infuse these technologies throughout all government services. This will ensure a flow of projects to attract overseas players to Malta and encourage start-ups.

You should also consider Malta if you wish to access the high-growth markets of the region. Malta has long-standing relationships with a number of African governments, and there are tremendous opportunities for companies wishing to enter the fast-growing African FinTech scene while basing themselves in an EU member state.

• Our FinTech Support System

Fintech companies have been drawn to Malta because the island provides a wealth of talent, both tech, and finance. The local labour pool is deep enough to meet the needs of ICT employers, with the workforce having a range of technical and creative skills. If needed, specialist knowledge can also easily be sourced from overseas due to an incentive programme for foreign workers, who can benefit from a 15% flat rate of personal income tax provided they met certain criteria.

International connectivity is also pivotal to the further development of this sector and is guaranteed by three operators providing international gateway services via fibre-optic cables to mainland Europe. The presence of data centres, security auditors, and cyber security experts contributes to a tailor-made environment that is conducive to growing a successful business.

Consultants with technical and/or financial expertise are always on hand, while our lawyers and accountants have a wealth of experience, ensuring that a vibrant and creative cluster of talent and know-how is in place to help companies manage and grow their operations.